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Students worried about the ballooning interest rates for new college loans will have to keep worrying, after the Senate failed again Wednesday to find a solution.

Senators voted to end discussion of a bill that would return federal student loans interest rates from the current 6.8% to the pre-July 1st rate of 3.4% for another year. The Democratic coalition of senators that supported the bill, led by Rhode Island Sen. Jack Reed and Iowa Sen. Tom Harkin, had hoped the one year solution would give legislators time to work out a permanent fix for the issue. “Today we fail,” announced Sen. Tom Udall, a New Mexico Democrat.

The vote was just the latest turn in a multi-year fight over student loans that has gripped Congress. Next to no progress has been made since the House voted its own bill through on May 23. The House bill links the rates to the 10-year Treasury note, and allows the rates to vary over the life of the loan. The White House has threatened to veto the House bill, however, citing as problems the absence of a fixed rate, the burden placed on low- and middle-income students, and the use of student loan revenue to reduce the deficit.

The gridlock paralyzing the Democrat-controlled Senate springs from arguments between two factions, one bipartisan and one Democratic. The Democratic proposal centered on a policy of “no harm,” as Michigan Democrat Debbie Stabenow put it. She suggested that another stop-gap measure would protect students in the short term while enabling the Senate to “work together on something comprehensive that does not, down the road, see students paying 7%, 8%, 9%, or in the House, on one of their rates, they top out at 10.5%. I reject that.”

The bipartisan proposal, shepherded by Senators Joe Manchin (D-W. Va.), Angus King (I-Maine), Richard Burr (R-N. C.), Lamar Alexander (R-Tenn.), Tom Carper (D-Del.), and Tom Coburn (R-Okla.), ties rates to the 10-year Treasury note, adding a fixed 1.85% to the note rate at the time of origination. The Democrat camp criticized the lack of a hard cap on the rates under this plan, claiming that in the long term students would pay more. Sen. Reed cited Congressional Budget Office predictions that students will pay $37.8 billion more in interest between 2017 and 2023 under the bipartisan plan.

The awkward situation has Democrats fighting each other as nothing gets done. As he promoted the bipartisan proposal, Manchin addressed his Democratic colleagues, slightly incredulous of his situation. “Ours saves $9 billion and my dear friends in my caucus only save $2 billion,” he said. Harkin repeatedly referred to the bipartisan bill as “Republican.” Earlier, Senator Manchin had said, “When they say ‘it’s the Republican bill’ that’s so erroneous, and it’s just not fair. This is truly a bipartisan effort.”

Andrew Gillen, research director at the independent think tank Education Sector, is surprised that the Senate hasn’t already reached a compromise. “This was a rare instance where you actually had largely bipartisan agreement on how the general solution should look like.” He rejected the return to 3.4% rate, as it’s an “arbitrary” number without “any thought” put into it.

Student loans currently account for roughly $1 trillion in debt in the United States, more than credit cards. If a deal is eventually struck, any future reduction in rates will likely be retroactive. And if a deal is agreed to before repayment begins on loans taken out at the current rate, students with new loans are unlikely to feel the impact. But the clock is ticking.

For now, Senator Manchin summed up the Senate predicament well: “Like everything else that’s happened here the last two or three years, nothing gets done.”

Providing consolidation of different loans into a single debt
can be very helpful. This will increase the ability of providing cuts on monthly
payments. This will help avoid payday
loans and other short-term loans. Otherwise this problem could grow and get
out of hand.

If the student loan rate from the Federal Government is less than you can get on the open market, then you are getting a deal, period.

As others have pointed out, why does a College Education cost as much as it does in the first place?

Why does the cost of a College Education rise at rates much higher than the cost of living or Inflation?

In a normal economy, if many people were wanting a service, and the cost was too high, soon lower cost suppliers would level the playing field and the higher cost suppliers would have to offer more value, become more efficient, or die off. No so it seems in Higher Education.

After Republicans denied Senators a cloture vote, Boehner brags: "Republicans acted to protect students from higher interest rates and make college more affordable, yet Senate Democratic leaders let student loan interest rates double without passing any legislation to address the issue."

So, Miles Graham, we deserve the country we get when reporters report that the bill failed due to Democrats bickering. I hope you get us more Ted Cruzes and Mike Lees and Gohmerts in the House, because you deserve them. Time should be ashamed of itself - you're a bigger problem than the extremists who control us.

<sarcasm font> As a middle class American with a child entering
college this year to become a pharmacist, I would like to say thank you
very much for making sure she's paying for it until she's ready to
retire. </end sarcasm font>

Look, I'm not going to say I have all the answers but I'm at least willing to hear why this is so unsettling to hear. My first couple of thoughts are to spurn conversation: why aren't we arguing about how much school costs to begin with- there's no reason it has to cost so much. If it didn't cost so much we wouldn't need to worry as much (although we still would need the loans). Why does the federal government have to subsidize these loans instead of letting the States have their own program. I read that the Congressional Budget Office claims the Federal Govt will pocket $50 BILLION this year, more than the $45 Billion Exxon made last year. Why isn't there more competition- maybe they let the rates increase to help promote banks or other entities offer more competitive offers- that would be why I would guess the Repubs voted NAY, they want out of the student loan biz. Why would we need to use student loans to bankroll other programs in the US, is that why the Dems are for it? There is other info that President Obama offered something similar to what the Repubs are offering but no one seems to be talking about that. Is the controlling Senate for something else to keep the lights on. These statements are more important than bickering about bipartisan crap. Folks, don't let politics divide us, think for yourselves.

Requiring 60 votes for a simple bill to fix something that will damage the middle class is about a low as it gets. And they don't even have to really filibuster - dammit Harry, why are you letting them get away with this crap, I want them to stand on the senate floor and explain why they are holding this up. It is totally unacceptable all the way around.

So the Democrat position is "Let's keep things where they are until we can come to a compromise agreement on this" and the "bipartisan" plan is "Let's just accept what the Republicans in the House have proposed for a year until we come to a compromise agreement on this".

Wouldn't the government make up almost any amount of money it puts into education in the form of higher taxes for the lifetime of the student? Doesn't not giving aid result in higher expenses in the form of more government aid to those that can't afford college?

Why doesn't the government offer the loans at an interest rate that is just high enough to cover it's expenses? It would seem this would cut the deficit (at all levels of government) by a significant amount 10+ years out, and make us more economically competitive, reduce the need for foreign workers, reduce poverty, etc, etc.

For all the people blaming the Republicans for "filibustering", Harry [G]Reid could have the Majority Democrats vote to change the filibuster rule at any time by simple majority vote. Since he is the leader of the party with the majority in the Senate, why doesn't he do that ? Could it be, that it's because he LIKES the way things are, so that the Democrats can vote for things they are really not in favor of, KNOWING that there are not enough votes to pass it, and then blame the Republicans so the Democrats can scream: "THE REPUBLICANS ARE FILIBUSTERING THE BILL !!!!" Could THAT be why ??? Naaahhhh.... The Democrats are SO honorable, they would NEVER do that ! :)

I heard that Congress voted to give all THEIR children breaks on their student loan interest rates.. Somebody check that out. If their kids get breaks, it should be against the law not to give breaks to the rest of the nation's kids. In fact, the citizens need to find a way to bypass congress and state legislatures in passing constitutional amendments to prevent Congress from passing juicy perks for themselves and skimping the rest of the us. We need to make sure they are accountable. They have gotten into the habit of being "comfortable." And they are "comfortable" with OUR discomfort. Not acceptable.

The system is broken and it obviously doesn't work. The interest rates were extended before so they could have time to come to an agreement. Now that time has passed and they still can't come to an agreement. Time to change the system...

Maybe the people who try to make it hard for regular(not born with silver spoon)students to get an education ,do it so so their spoiled brats won't have to compete with them in the work place.Kind of like when years ago when it was illegal to teach black people to read

Gee. Reading this article, you would never guess that the reason last years rates weren't extended was yet another Republican filibuster.

I mean, take a look at the article. No "Republican". No "filibuster". Even though _every_Senate_Republican voted to extend debate (ie filibuster)...and on the other hand, 52 Senators voted to cut off debate and would pass the bill if thr Republicans would let it come to a vote.

Please call it what it is. The fact that one Democrat disagrees doesn't change the fact that this was another Republican filibuster.

Talk about fked-up priorities. The idea is to make education more affordable and create a more highly-skilled workforce, not to see who's saving more tax dollars...the Dem caucus is right in opposing Manchin's proposal, or any attempt to produce revenue via student loans.

> “This was a rare instance where you actually had largely bipartisan agreement on how the general solution should look like.”

Unfortunately, this is a non-rare instance where bipartisan, middle-of-the-road legislation is a less-than-optimal solution to a problem.

> “When they say ‘it’s the Republican bill’ that’s so erroneous, and it’s just not fair. This is truly a bipartisan effort.”

Bullsht. If your 'bipartisan' bill mirrors the one the Republican-controlled House just passed, then it's a Republican bill.

"Harkin repeatedly referred to the bipartisan bill as “Republican.”
Earlier, Senator Manchin had said, “When they say ‘it’s the Republican
bill’ that’s so erroneous, and it’s just not fair. This is truly a
bipartisan effort.'"

this is pathetic. even if it was a "republican" bill, isn't the goal supposed to be saving money for students instead of ensuring a "democratic" bill goes through? thank god i'm out of college

Assuming that a part of the government agree in this sentiment. And it doesn't - it want student loans back in the hands of predatory lenders. Making the doubling to 6 seems like a bargain in the process.

@benso033gm I thought the same thing. The writer is obviously a Republican trying to skew the blame of the Republican filibuster onto the Democrats. With writing like this, I can't believe he doesn't work for NewsCorp.

@benso033gm A lot of this "change in tone in the media" as Republicans would call it is due to the Zimmerman trial. The bosses are feeling very upset because the majority of us are not biting the stuff they have been trying to feed us. So this is their latest attempt of skewing the truth. If you haven't already, please make others aware of this. Welcome to the Real!